Michigan Charitable Gambling Rules Take Effect

LANSING (AP) – The Michigan Gaming Control Board on Wednesday put into place rules reining in Las Vegas-style charitable gambling events that regulators say have run amok and charities say are an important source of income.

Poker rooms that host many of the “millionaire party” events now can operate just 208 days a year and have no more than two parties per location in a day. They can take a 45 percent cut of profits instead of the current 50 percent split between poker room and charities.

The regulations took effect the same day a House committee considered a Senate-passed bill that would ease some of the rules and raise limits on how much money can be gambled at charitable events. A legislative rules committee could have objected to the regulations in recent months but chose not to after getting the Gaming Control Board to make some changes.

Yet Gov. Rick Snyder’s administration and lawmakers – who have heard complaints from charities and the industry – have been at odds over how much to rein in charitable gambling.

“The rules … don’t allow enough games to take place so enough charities can be served so the rooms can make enough money. They need to make enough money to exist,” said Sen. Rick Jones, R-Grand Ledge, sponsor of the Senate legislation.
Ari Adler, spokesman for House Speaker Jase Bolger, R-Marshall, said “good discussions” occurred on the bill in committee Wednesday and the chair agreed to hold at least one more hearing on the issues. But it is unclear if the House will send the legislation to Snyder, who could veto it.

The sides agree that there should be criminal background checks and licensing of the poker rooms that run popular Texas Hold `Em and blackjack fundraisers for charities in exchange for a cut of the profits. But they differ over how profits should be split, caps on the number of charities hosting the casino-style events concurrently at a single location and how many days a year poker rooms can operate.

The Gaming Control Board has cracked down on some larger bars, which contributed to a 22 percent drop in licenses issued for millionaire parties through the first half of last year. On Tuesday, the board suspended all charitable poker and gambling at Mr. B’s in Troy due to suspected illegal gambling and fraudulent activities involving a millionaire party supplier.

Twenty-three sites have been closed for illegal gambling since 2010.

Revenue from the events reported to the state was $7.9 million in 2002, but was $184 million in 2012. Charities’ profits rose from $3.6 million in 2002 to $15.8 million a decade later.

The state has said charities got 81 percent of the proceeds a decade ago but now receive half under profit-sharing agreements never envisioned when the charity games were authorized in a 1976 update of the Bingo Act. Charities say that while they are taking less of the cut on a percentage basis, they are still raising much more money than in past years.